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November 07, 2016

By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica

The Dow Jones Industrial Average is up 1.5% in early trade a day ahead of Election Day 2016

U.S. stocks jumped Monday, putting equities on track to snap a historic streak of daily losses, after the Federal Bureau of Investigation said its fresh review of Hillary Clinton's emails wouldn't lead to charges, triggering a global relief rally as political worries eased.

The day's gains were broad, with all of the S&P 500's primary sector advancing on the day and major indexes up more than 1%. The gain followed a nine-day streak of losses for the S&P 500, the longest such losing streak since 1980, which was in large part triggered by polls showing acloser contest between Clinton, the Democratic nominee, and Republican Donald Trump.

FBI Director James Comey said Sunday he had informed Congress there were no new findings in the additional emails (http://www.marketwatch.com/story/fbi-review-of-clinton-emails-hasnt-led-to-new-findings-chaffetz-says-2016-11-06) discovered on the computer of former Rep. Anthony Weiner, whose estranged wife is Clinton aide Huma Abedin. News that the FBI had discovered fresh emails just over a week ago jolted the presidential election race, taking a toll on the Democratic nominee Clinton's lead in polls over rival Donald Trump.

"The rally is all about Clinton having a better chance of winning, though I don't think the market is celebrating her policies so much as reflecting how markets, like many Americans, are fearful of the unknown that comes with Trump," said James Meyer, chief investment officer at Tower Bridge Advisors.

Financial markets in general view a Clinton win as the better outcome in Tuesday's election, as it presents fewer unknowns and possibly more stability for markets than victory for her rival.

While the day's gains were broad, financials were the biggest gainers of the day. The S&P financial index popped 2%, boosted by a 2.5% rise in shares of Goldman Sachs Group Inc. (GS). J.P. Morgan Chase & Co. (JPM) climbed 2.4% to $69.34.

Read: Here are all possible election outcomes--and how markets will react (http://www.marketwatch.com/story/heres-every-possible-election-outcome-and-every-market-reaction-2016-11-04)

Despite the gain on the day, the election should remain an overhang of uncertainty until a winner is decided. Investors are also paying close attention to what party will control the Congress and Senate.

"How markets will perform from today's open through tomorrow's close is anybody's bet," said Meyer. "To the extent Clinton's probability of winning changes, the market will change with it."

The appetite for riskier assets triggered a global equity rally, with European stocks up more than 1%. In Asia, the Nikkei 225 index soared 1.6% as the Japanese yen fell against the dollar. The yen and gold are seen as assets that investors turn to in times of economic and political uncertainty.

Gold was down 1.4%, after gaining (http://www.marketwatch.com/story/oil-prices-rebound-driven-by-latest-us-political-developments-2016-11-07)2.2% last week (http://www.marketwatch.com/story/gold-marooned-as-traders-brace-for-jobs-report-and-presidential-races-final-days-2016-11-04) on a boost in the polls for Trump. Oil (http://www.marketwatch.com/story/oil-prices-rebound-driven-by-latest-us-political-developments-2016-11-07) rose 1.6% on the day.

The dollar saw big gains, with the ICE Dollar Index , which measures the greenback against a half-dozen rivals, up 0.6% on the day.

The Mexican peso traded at $18.57 to the dollar, versus $19.02 earlier in Asia ahead of the FBI headlines. Many believe a Trump victory would harm the Mexican economy as the candidate has repeatedly promised to raise trade barriers and build a wall on the U.S.-Mexican border.